Boeing's Air Force One Bill Tops $3 Billion
A fresh $280M charge on the VC-25B program pushes total losses past a grim milestone — and the jets won't fly until 2028.
By The Defense Desk
Boeing added another $280 million to the VC-25B's ledger during its second-quarter earnings, pushing total losses on the planned Air Force One replacement past $3 billion for the first time. [1]
The company attributed the charge to "an investment in additional production and certification resources," as the program moves toward flight testing. [1] "While the charge is disappointing, we recognize how critical schedule performance is to our customer and we are investing accordingly to maintain our commitment to deliver the airplane in 2028," Ortberg said. [1]
None of this surprised analysts watching the program closely. [1] Parker declined to comment on when Boeing would log those charges, citing the silent period that occurs in the weeks before a company releases its earnings — but the write-down arrived on schedule, if nothing else did. [1]
The VC-25B sits inside a firm, fixed-price deal agreed to by President Donald Trump in 2018, with a $3.9 billion ceiling. [1] Boeing is contractually responsible for every dollar of cost overrun beyond that figure. [1] The cumulative value of the deal has already crept to just over $4.3 billion following a $15.5 million contract modification the Air Force awarded for communications equipment in December. [1]
Fixed-price contracts are meant to transfer financial risk from buyer to builder — a clean theory that tends to buckle when the thing being built is singular, complex, and politically loaded. When cost discipline collides with national symbolism, the builder rarely walks away.
The VC-25B is far from Boeing's only fixed-price wound. [1] Ortberg told investors the KC-46 is now at "very low risk" of further charges as Boeing nears the end of its current contract, while MQ-25 and T-7 carry "normal risks" with no specific problems flagged. [1]
Starliner is the outlier Ortberg singled out. "We've got to work with NASA to align on how the launches are going to be—both the crewed and uncrewed launches going forward," he said. "I don't at this time anticipate that's going to create a cost problem for us, but we do have some uncertainty here." [1] That caveat, delivered on an earnings call, is the kind of sentence that tends to age poorly.
On the defense unit broadly, operating margins went negative in Q2 as a direct result of the VC-25B charge. [1] CFO Jay Malave told investors he remains confident that the unit will return to high single-digit margins by the end of the decade. [1]
Progress and losses are not mutually exclusive — and Boeing is insisting, with some evidence, that it is both bleeding and moving forward. The harder question is whether the accounting pain has finally stabilized or whether the next charge is simply waiting for the next quiet period to end.
Three billion dollars in losses. A 2028 target the program cannot afford to miss. The margin for error on the most visible plane in American aviation is, at this point, precisely zero. [1]